EUR/USD takes 1.1000 after Draghi’s comments

EUR/USD continued its tumble after Draghi’s comments that the ECB is willing to buy bonds trading at a negative yield down to the ECB’s deposit rate. EURUSD briefly managed to take out the 1.1000 (S1) psychological support line. A sustained break of that line would signal larger bearish extensions and initially aim for the 1.0915 (S2) obstacle, marked by the low of the 5th of September 2003. A strong US employment report today could be the catalyst for such a move. Our daily technical oscillators detect accelerating downside speed and amplify the case for a lower EUR/USD. The 14-day RSI entered its oversold territory and is pointing down, while the daily MACD, already negative, fell below its trigger, and points south as well. With regards to the broader trend, I believe that the pair is still in a downtrend. EURUSD is printing lower peaks and lower troughs below both the 50- and the 200-day moving averages.

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